Local Government Center to pay out $33.2 million from surplus

By TIM BUCKLANDNew Hampshire Union LeaderJune 26. 2013 10:34PMCONCORD — The New Hampshire Local Government Center will send out checks on Aug. 27 totalling $33.2 million from surplus funds that a state hearing officer ordered be returned to member towns, cities and school districts in the public insurance administrator’s health insurance pool.

LGC interim Executive Director George Bald announced the disbursements on LGC’s website, nhlgc.org.

The returns amount to windfalls for taxpayers of each municipality and school district.

Portsmouth City Manager John Bohenko said the city, which is set to receive nearly $650,000, factored the return of surplus in this year’s budget for health insurance. He said the city plans to issue refunds to employees who pay premiums for health insurance.

“I think it’s good news for us,” he said of the expected payment. “It gave us an opportunity to lessen the impact on the budget. We’re very pleased to be receiving the surplus back.”

According to the lists, the largest share — $1.16 million — is scheduled to be returned to School Administrative Unit 16, which includes Exeter and several surrounding towns.

The amounts reflect returns from premiums paid for health and dental coverage up to 2010. Bald said in his announcement that the return of funds is in addition to a scheduled return of surplus funds from 2011.

Wendy Parker, LGC’s deputy director for risk pool operations, said LGC calculated the returns based on how much each member paid into the health insurance pool.

“So if you paid 1 percent of contributions, you would get 1 percent of the return,” Bald said.

Several towns who left LGC’s health insurance pool have appealed to the state Supreme Court to be included in the repayment. Bald said in a message to members that, if the towns’ appeal is successful, it could affect how much each member community receives.

The return of $33.2 million is one of two payments LGC must make to members to comply with a hearing officer’s order that determined that LGC was keeping too much money in reserve funds. The other, a $3.1 million payment to return surplus money to members of LGC’s Property and Liability Trust, is also due Sept. 1.

Bald said staff wanted to tackle the larger of the two payments first, but said the return of money to Property and Liability Trust members likely would follow “a similar formula.”

Bald has yet to publicly identify how LGC will return a third payment of that calls for returning $17 million that was taken from members of the agency’s health insurance risk pool and used to subsidize a workers’ compensation program. The order determined that, because the members of the two risk pools didn’t match, the transfers of money were improper.

The workers’ compensation program has no cash reserves and LGC officials are struggling with how they will pay the money back. The $17 million payment is due Dec. 1.